Employees of the Manila city government will soon get some relief from high-interest lenders as the Government Service Insurance System (GSIS) makes available to them its financial assistance loan (GFAL) program.
On its website, the state-run pension fund said its chair Rolando L. Macasaet last Feb. 4 signed with Manila Mayor Isko Moreno a GFAL agreement, which “will allow Manila city hall employees to transfer their loans from other lending institutions to the GSIS at a lower interest rate and amortization and longer payment term.”
While GFAL originally covered only Department of Education (DepEd) employees at its launch in 2018, the GSIS eventually expanded the program to cover other government agencies as well as local government units (LGUs) since 2019.
As of last month, a total of 1,689 agencies and LGUs had entered into agreements with the GSIS to make GFAL available to their employees.
Almost 200,000 GSIS members had already availed themselves of GFAL, with a total of P80 billion in loan disbursements to date.
The loan program slaps a lower interest rate of 6 percent per annum during a longer six-year repayment period.
Macasaet, also the GSIS’ acting president and general manager, said GSIS members may transfer their loans of up to P500,000.
If members’ loan was below P500,000 “the balance may be applied for as top-up loan,” said Macasaet.
The top-up loan was offered, he said, to help GFAL borrowers “augment their funds to defray for their other needs.”
Macasaet said GFAL was designed to draw members to GSIS “instead of running to private lenders.”
GFAL, Macasaet said, was the GSIS’ response to President Rodrigo Duterte’s call “to help free government employees from the clutches of lending institutions who practice schemes such as 5-6 which are often tied with hefty double-digit interest rates.”